Merchant Companies and Non Merchant Companies
A merchant (ecommerce) company is a company that owns the items that they sell before they resell them. Some examples are Business-to-consumer transactions, Business-to-business transactions and Business-to-government transactions.
A B2B transaction is common among a supply chain. It is the intereaction between two companies. An
example would be the purchase and distribution of goods to a department store.
A B2G transaction occurs between a company and a government organization. An example would be the manufacturing and distribution of vaccines that are purchased by the government from the Manufacturers.
A B2C transaction is a transaction that occurs between a business and a consumer. An example would be the purchase of clothing off of a clothing store website.
Merchant companies use these business models along the supply chain. They can use the B2B model to from Supplier to Manufacturer, from Manufacturer to Distributor and from Distributor to the Retailer. When the Retailer sells to the Consumer then they would be using the B2C model. Business along the supply chain that do business with the Government would be using a B2G system.
A nonmerchant (ecommerce) company is a company that merely sets up the sale of a good or service without ever owning it. Some examples include: Auctions, Clearinghouses and Exchanges.
Examples of common nonmerchant ecommerce companies:
Auctions: Ebay.com is a popular example of an ecommerce auction. Auctions play the role of matching a buyer and seller while they receive a commision from the price of the goods that they sell. The ecommerce application of auctions online enable the company to support and sustain a competitive-bidding process.
*Check out this you tube video about a government auction site, govsales.gov. This site allows you to see the assests that the government is selling. This would be a form of an auction.
Clearinghouse: Amazon.com is a widely known clearinghouse. A clearing house provides goods for a given price and also arranges for delivery similar to an auction. A clearinghouse would take payment from the buyer and then transfer it to the seller. Each item sold the clearinghouse receives a commission and would deduct it before the transfer of payment for the item to the seller.
Exchanges: Priceline.com is a commonly used form of an exchange. An exchange matches up the potential buyer and sellers. The the seller offers goods at a given price and then the buyers would make an offers to purchase over the same exchange. Then the company, or exchange, takes a commission. This process is comparable to the "stock exchange."
Check out this Youtubevideo. It talks about how to sell your first time on Ebay! Familiarilize yourself with an example of a nonmerchant company...